You might also want to read the commentary of the verses about Jews/Children of Israel. You can do so at
http://www.tafheem.net/tafheem.html
About the Covenant and the Jews high position, God had given them the high position of becoming leaders of mankind and source of guidance. But when they broke the covenant and became disbelievers, that high position was taken away from them and given to a new nation (non-Jews). This was one reason why the Jews didn't accept Prphet Muhammad (SAW) as the Messenger of God although they had been waiting for the birth of a Prophet. They had expected that the Prophet would be chosen amongst the Jews and were not happy that he was chosen from the Arabs.
Here are a few verses with commentary:
(2:87) And We gave Moses the Book and sent after him a train of Messengers in succession. Then We sent Jesus, son of Mary, with clear Signs and supported him with the Holy Spirit. *93 Then how is it that whenever a Messenger came to you with that which did not suit your lusts, you grew rebellious against him, and repudiated some and slew others.
*93. The 'spirit of holiness' signifies the knowledge derived through revelation. It also signifies the angel Gabriel who brought this revelation. It also denotes the holy spirit of Jesus, the spirit which God had endowed with angelic character.
The expression 'clear proofs' refers to those signs which are likely to convince a truth-seeking and truth-loving person that Jesus is a Prophet of God.
(2:88) They say, "Our hearts are secure [wrapped or hardened]." *94 Nay, the fact is that Allah has cursed them for their disbelief; so they are little disposed to believe.
*94. They said, in effect, that they were so staunch in their beliefs that their convictions would remain unaffected regardless of what was said. Such a claim is the hallmark of those bigots whose minds are seized by irrational prejudice. Nothing can be a matter of greater shame for human beings than the so-called firmness of conviction which they often boast of. What can be more foolish than adherence to inherited beliefs and convictions when their falseness is established by overwhelmingly strong arguments?
*95. Before the advent of the Prophet, the Jews were eagerly awaiting a Prophet whose coming had been prophesied by their own Prophets. In fact, the Jews used to pray for his advent so that the dominance of the unbelievers could come to an end and the age of their own dominance he ushered in. The people of Madina were witnesses to the fact that these same Jewish neighbours of theirs had yearned for the advent of such a Prophet. They often used to say: 'People may oppress us today as they wish, but when our awaited Prophet comes, we will settle our scores with our oppressors.'
Since the people of Madina had themselves heard such statements they were inclined to embrace the religion of the Prophet all the more readily lest their Jewist neighbours supersede them in acquiring this honour. It was therefore astonishing for them to find that when the promised Prophet did appear those same Jews who had so eagerly looked forward to welcoming him turned into his greatest enemies.
The statement 'and they recognized it' is confirmed by several contemporaneous events. The most authentic evidence in this connection is that of Safiyah, a wife of the Prophet, who was herself the daughter of one learned Jewish scholar (Huyayy b. Akhtab) and the niece of another (Abu Yasir). She says that when the Prophet migrated to Madina both her father and uncle went to meet him and conversed with him for quite a while. When they returned home, she heard the following conversation:
Uncle:Is he really the same Prophet whose advent has been prophesied in our Scriptures?
Father: By God, he is.
Uncle: Do you believe that?
Father: Yes..
Uncle. Then what do you intend to do?
Father: 1 will continue to oppose him and will not let his claim prevail as long as I live.
(Ibn Hishim, Sirah, eds., Mustafa al-Saqqa' et al., 2 vols., II edition, Cairo, 137511955, see vol. 1, pp. 518 f. See also Ibn IshAq, The Life of Muhammad, tr. and notes by A. Guillaume, London, Oxford University Press, 1955, pp. 241 f. - Ed.)
(2:142) Of course, the foolish people will say, "What has turned them abruptly away from the giblah towards which they formerly used to turn their faces in prayer?" *142 Tell them, O Messenger, `'East and West all belong to Allah; He shows the Right Way to anyone He wills." *143 Thus have We made you a Community of the "Golden Mean" so that you may be witnesses in regard to mankind and the Messenger may be a witness in regard to you. *144
*142. After his migration to Madina the Prophet continued to pray in the direction of Jerusalem for between sixteen and seventeen months. Subsequently, he received the order to pray in the direction of the Ka'bah. (See verse 144 below)
*143. This is the first answer to the objections of these ignorant people. Their narrow minds and limited vision led them to undue attachment to such formalities as the direction and locale of Prayer. They presumably conceived God to be confined to a particular direction. In reply to their absurd objection the first thing which was explained was that all directions belong to God. Fixing any particular direction for Prayer does not mean that God is confined to that direction. All those who have been favoured with God's true guidance rise above such limitations of outlook so that it is easy for them to grasp the universal verities of religion. (See also nn. 115 and 116 above.)
(2:143) We had appointed the former giblah towards which you used to turn your face merely to test who would follow the Messenger and who would turn back. *145 It was indeed a hard test but not for those who had been blessed with Guidance from Allah. Allah will not let go to waste this faith of yours; rest assured that He is full of pity and mercy for mankind.
*144. This constitutes the proclamation appointing the religious community (ummah) consisting of the followers of Muhammad to religious guidance and leadership of the world.
' And it is thus', which precedes this proclamation, contains two allusions. It alludes, in the first place, to that Divine Guidance which enabled the followers of Muhammad to know the Straight Way so that they could attain progress to the point of being proclaimed 'the community of the middle way' (or 'the mid-most community' or 'the community justly balanced' - Ed.) In the second place there is an allusion to the change in the direction of Prayer from Jerusalem to the Ka'bah. People of limited intelligence could see no significance in this change of direction although the substitution of Jerusalem by the Ka'bah amounted to the removal of the Children of Israel from their position of world leadership and their replacement by the ummah of Muhammad (peace be on him).
The Arabic expression which we have translated as 'the community of the middle way' is too rich in meaning to find an adequate equivalent in any other language. It signifies that distinguished group of people which follows the path of justice and equity, of balance and moderation, a group which occupies a central position among the nations of the world so that its friendship with all is based on righteousness and justice and none receives its support in wrong and injustice.
The purpose of creating 'the community of the middle way', according to this Qur'anic verse, is to make it stand as witness 'before all mankind and the Messenger might be a witness before you'. What this rneans is that when the whole of mankind is called to account, the Prophet, as God's representative, will stand witness to the fact that he had communicated to the Muslims and had put into practice the teachings postulating sound beliefs, righteous conduct and a balanced system of life which he had received from on high. The Muslims, acting on behalf of the Prophet after his return to the mercy of God, will he asked to bear the same witness before the rest of mankind and to say that they had spared no effort in either communioating to mankind what the Prophet had communicated to them, or in exemplifying in their own lives what the Prophet had, by his own conduct, translated into actual practice.
This position of standing witness before all mankind on behalf of God, which has been conferred on this community, amounts to its being invested with the leadership of all mankind. This is at once a great honour and a heavy responsibility. For what it actually means is that just as the Prophet served as a living example of godliness and moral rectitude, of equity and fair play before the Muslim community, so is the Muslim community required to stand vis-a-vis the whole world. What is expected of this community is that it should be able to make known, both by word and deed, the meaning of godliness and righteousness, of equity and fairplay.
Furthermore. just as the Prophet had been entrusted with the heavy responsibility of conveying to the Muslims the guidance which he had received. in a like manner a heavy responsibility has been laid on the Muslims to communicate this guidance to all mankind. If the Muslims fail to establish before God that they did their duty in conveying to mankind the guidance they had received through the Prophet they will be taken to task seriously and their honourable position as the leaders of the whole world, far from being of any help to them, will spell their disaster. They will be held responsible along with the protagonists of evil for all the errors of belief and conduct which have spread during their term of leadership. They will have to face the grim question: What were they doing when the world was convulsed by storms of transgression, injustice and error?
*145. One purpose of this change in the direction of Prayer was to find out who was blinkered by irrational prejudices and chained by chauvinistic attachment to land and blood, and who, having liberated himself from those bonds, was capable of rising to the heights and grasping the Truth.
On the one hand were the Arabs who were steeped in their national and racial arrogance. For them, taking Jerusalem as the direction of their Prayer (as originally practised by the Prophet) was too hard a blow to their national vanity to be accepted with equanimity. On the other hand, the Jews were essentially no different. They, too, were obsessed with racial pride so that it was difficult for them to accept any other than the direction of Prayer which they had inherited from the past. How could the people whose hearts were full of such idols respond to the call of the Messenger of God? Hence, God saw to it that the worshippers of such idols were distinguished from the genuine worshippers of God by first fixing Jerusalem as the direction of Prayer. This was bound to alienate all those who had worshipped the idol of Arabianism. Later, the fixing of the Ka'bah as the direction of Prayer led to the alienation of those who were engrossed in the worship of the idol of Israel. Thus there were left with the Prophet only, those who truly worshipped none but the One True God.
